Does Owning Gold Make You Crazy?

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JAG's picture
JAG
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Does Owning Gold Make You Crazy?

It could be that I'm just hitting the 1000 post wall, and will soon go the way of Sam Linder and Davos: burnout, but I'm starting to see a strong correlation between how much gold one owns and how this taints one's perception.

Its no longer enough to just hold gold as an investment, one has to buy gold now because they fear something. The more gold you own, the more one must believe that the worst case scenario must happen. Statistically, the worst case scenario is always a low probability event, but the "golden goggles" makes one think the worst case scenario is a high probability event.

Many people feel that owning gold gives them "peace of mind". I contend that this is a short-sighted perspective. What eases your anxieties today is only fuel for the anxieties of tomorrow. What is the antidote for tomorrow's anxiety? More gold. And thus the cycle repeats until one's perception of reality is so distorted that one can only be classified as crazy.

The blogosphere is flooded with this craziness, and truth be told, this site is no exception. 

Perhaps we should all ask ourselves this question:

Do I own gold or does gold own me?

Ken C's picture
Ken C
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Re: Does Owning Gold Make You Crazy?

Indeed, that is a good reason to temper some gold buying by getting some silver also.Cool

 

Ken

 

 

 

VeganDB12's picture
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Re: Does Owning Gold Make You Crazy?

At least when you buy silver you have to consider the reality of lugging all of that weight around before you take the plunge.....

Having cash holdings could have the same effect IMO,  and stocks/bonds create their anxieties too.   No matter what position you take in investing you get "invested in the outcome".  You raise a good point though.  Perhaps the anxiety that "it is never enough" relates more to the desire for complete safety and security.  I think complete safety is pretty much an illusion but a natural desire for most of us. 

ao's picture
ao
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Re: Does Owning Gold Make You Crazy?
JAG wrote:

Do I own gold or does gold own me?

Isn't that true of any material possession?  Any material possession one values over relationships will inevitably lead to a little bit of craziness.  Ultimately, relationships are the only thing that truly matters in the long term.  The material is important but it isn't everything or even the most important thing.  Ah, but then we begin to ponder the unmentionable here, the spiritual.;-)

From my point of view, I look at gold as just one of a number of forms of insurance, nothing more.  

 

bearing01's picture
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Re: Does Owning Gold Make You Crazy?

Relationships won't feed you in the event of economic collapse - when your friends have no wealth to share with you.  You need some asset of value that can be used in exchange for other values - with strangers that have wealth to trade.

I own gold.  If you fear the worst, do the following:

1) Own supplies that can sustain you and your family in the event of armageddon.  Food, Water, Energy (propane, etc), Medical supplies.

2) Own a gun or other means of defending  and protecting yourself and your family in the event that you need to.

3) Own gold.  You may have to use your gold to buy #1 and #2.

 

Also, gold is also not for armageddon.  It's a hedge against mass inflation.  It is not considered money today (it isn't currently being used in exchange for goods/services due to legal tender laws) but is a monetary asset.  If it wasn't, the Federal Reserve and other central banks (like China) wouldn't hold it on their balance sheet.

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Re: Does Owning Gold Make You Crazy?

I don't know about owning it making you crazy.  Eating it might. Wink

I do think Martin Armstrong is very correct in saying that gold responds to attacks upon and fragility of the legal and economic systems.  Fear is certainly the key word.  

nickbert's picture
nickbert
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Re: Does Owning Gold Make You Crazy?
Quote:

Does Owning Gold Make You Crazy?

Of course not!  Who said that?  Was it those squirrels in the tree across the street talking about me again?  Was it?!? 

<mumbling voice> "...damn lying squirrels...."

Tongue out

- Nickbert

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Re: Does Owning Gold Make You Crazy?

This is absurd! I can't believe this thread!! It's a well known fact that insanity proceeds gold ownership. Wink

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Re: Does Owning Gold Make You Crazy?

Seriously though, I think you're right that commonly fear is a motivator for some people who buy gold, probably moreso than most other things.  And of course there are a handful of people out there who've been expecting/waiting (or even eagerly anticipating) for the SHTF for many years and this is sometimes but not always is rooted in fear or paranoia, and the nature of gold attracts that mindset.  So it doesn't surprise me in the least to see some people get very obsessive about gold and get locked into an expectation of the worst, if that were to help justify their actions to themselves.  For myself I consider gold a measured precaution, and if I tend to hold a lot of my wealth in gold and silver I think it says more about my personal situation (need to stay flexible and relocatable) and the higher risk associated with other assets than anything else.  While I am feeling a little more of a vested interest in the direction of gold, in my mind a skyrocketing gold price still wouldn't make up for the damage an associated currency crisis would do to my future earnings.  Or for that matter, to society as a whole... I want to see meaningful and very substantial change to the way this country is run, but like anyone I don't want to see people suffer more than is necessary for change to happen.  That usually keeps me on an even keel with respect to my PM holdings.

- Nickbert

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Re: Does Owning Gold Make You Crazy?

Does owning U.S. Government bonds at 0.98% make you crazy? Does owning Municipal bonds at 0.75% make you crazy? Does owning stocks which have risen 55% since the low in March make you crazy? Does owning a currency, the U.S. dollar which is "supported" by 55 TRILLION dollars in debt make you crazy?  Does the fact that the U.S. National Debt is 11,845,809, 202,955 and counting make you crazy? Does the fact that every man, woman and child own 38,512 of the U.S. debt make you crazy?  Does the fact that current price of gold hardly reflects the inflationof the past 20 years and that it has not even begun to price in the expected rate of inflation make you crazy? Does the fact that gold has been mankind's  storehouse of value since 5000 BC make you crazy?  Does the fact that about 99% of the worlds paper currencies are backed by the nothing but the taxing power of the government make you crazy?

JAG's picture
JAG
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Re: Does Owning Gold Make You Crazy?

Thanks everyone for the input.

Even though this is the dreaded "posto-loco" 1000 for me, at least I can find comfort in the fact that I'm not alone in the loony bin. 

Now excuse me while I go continue my conversation with my gold coins....Laughing

All the best...Jeff

ao's picture
ao
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Re: Does Owning Gold Make You Crazy?
bearing01 wrote:

Relationships won't feed you in the event of economic collapse - when your friends have no wealth to share with you.  You need some asset of value that can be used in exchange for other values - with strangers that have wealth to trade.

I own gold.  If you fear the worst, do the following:

1) Own supplies that can sustain you and your family in the event of armageddon.  Food, Water, Energy (propane, etc), Medical supplies.

2) Own a gun or other means of defending  and protecting yourself and your family in the event that you need to.

3) Own gold.  You may have to use your gold to buy #1 and #2.

 

Also, gold is also not for armageddon.  It's a hedge against mass inflation.  It is not considered money today (it isn't currently being used in exchange for goods/services due to legal tender laws) but is a monetary asset.  If it wasn't, the Federal Reserve and other central banks (like China) wouldn't hold it on their balance sheet.

Actually, relationships will feed and support you in the event of an economic collapse.  I bought all the gold I needed back in 2001, am very well aquainted with the virtues of precious metals, and am well stocked up on firearms, ammunition, and the skills to use them (read my posts) and many other supplies but relationships are even more important.  If you're a loner, you're in for difficulty.  Relationships with people, especially those you know and trust, who will exchange food, fuel, supplies, skills, support, etc., will prove invaluable.  Good luck if you're out there all alone with just guns and gold ... you'll need it.

 

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Cloudfire
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On How to Hold Our Wealth

Hi, Jeff;

Thanks for the insightful original post on this thread . . . . There's a lot of truth in it . . . . I've shared much of the same anxieties . . . . and have been tempted, on occasion, to put all my chips on one bet.  (It's hard for me to think of it as investing, anymore . . . . This environment has more of the hallmarks of gambling than of reasoned investment.)  But also, it must be said that anyone who is certain of the direction of this economy (inflation vs. deflation) is suffering from delusions of grandeur . . . . Only one thing that is certain:  We are in uncharted territory  . . . . There is no identical historical model for the current state of world economics.  And even if there was, there's a very powerful wild card in our inability to predict the actions of those who are in a position to manipulate the market.  I'm no economic wizard, but in this environment, my ignorance may be an advantage . . . . I don't suffer from the notion that I can figure this thing out . . . . 

More . . .   (See the September 27, 2009 post, "On How to Hold Our Wealth", at cloudfireonfire.com).

NMNJGRL's picture
NMNJGRL
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Re: Does Owning Gold Make You Crazy?

Are the Chinese crazy for buying up gold (among other things) and telling the general population to own silver?

'Nuff said...

Denny Johnson's picture
Denny Johnson
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Re: Does Owning Gold Make You Crazy?
JAG wrote:

 What eases your anxieties today is only fuel for the anxieties of tomorrow.

Hi Jeff,

I reckon your point has some merit, but it seems to be based on the above assumption, which is not necessarily true.

ivoryjackal's picture
ivoryjackal
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Re: Does Owning Gold Make You Crazy?

Jeff

I own quite a bit of gold and about the only craziness I can find in myself is paranoia about who knows where I hid it.  I thought it was buying guns that made you expect the worst case scenario anyway...

My mindset at the moment is such that all of my extraneous income (that which in years past would have gone into savings - we're talking income above and beyond what I'll need for the next six months cash expenses and whatever other stuff I want) gets put into gold rather than the bank.  This is not only an investment decision but (really at this point more so of) a safety decison.  Martin Armstrong again - my lack of confidence in the institutions and the rule of law.  My sincerest hope, though, is that I'm proven totally stupid and that this is the worst economic decision I ever made in my life.  In that case I've got a bunch of pretty coins and so much employment I don't know what to do with all the cash.  Much better to hope for than armageddon.

Daniel

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